The recent release of a Parliamentary report suggests that implementing measures to address food inflation, such as removing “best before” labels and standardizing packaging sizes, could help Canadians save money. The report, issued by the Standing Committee on Agriculture and Agri-Food, examines the reasons behind the significant increase in grocery prices over the past year. While the report does not place blame on grocers themselves and defers to an upcoming Competition Bureau report on concentration in the grocery sector, it does present recommendations to control food inflation.
One recommendation focuses on the impact of removing “best before” dates to reduce food waste. The committee also proposes extending the implementation timeline for the single-use plastics ban for certain grocers to ensure that their packaging is designed to prolong the shelf life of food. The CEO of Second Harvest Canada highlights the misunderstanding surrounding “best before” dates, explaining that they indicate peak freshness rather than expiration, and eliminating them would prevent good food from being thrown away and save Canadians money.
Another aspect the report addresses is “shrinkflation,” in which producers maintain prices while reducing the size of packaging. To combat this, the committee suggests adopting a standardized approach for unit pricing, enabling consumers to make informed decisions while shopping. The report also includes recommendations for a grocer code of conduct, initiatives to provide producers with reliable labor and promote automation, and partnerships with provinces and territories.
The committee’s inquiry into food inflation was partially prompted by accusations of price-gouging or “greedflation” by grocers during a period of high inflation. However, grocers have denied these claims, attributing the increased costs to their suppliers. The Committee recommends that if evidence of price-gouging emerges, a windfall tax should be imposed on grocery giants to discourage such practices. Limited transparency in companies’ financial disclosures hampers investigations into possible profiteering, as profit margins on food sales are often intertwined with earnings from other store components.
Food inflation has eased slightly in 2023, with inflation rates in April at 9.1% compared to November’s peak of 11.4%. However, this is still more than double the overall inflation rate. A report from the Royal Bank of Canada attributes rising grocery prices to external factors, such as geopolitical events, extreme weather, and global recovery from the COVID-19 pandemic. While the food supply chain has adapted to recent disruptions, extreme weather events are increasing in frequency. Therefore, while stabilization of food inflation is expected in the coming months, prices are unlikely to return to pre-pandemic levels.
Overall, experts agree that relief from food inflation does not imply a return to pre-pandemic affordability. While prices are rising at a slower pace, they are still increasing. The report emphasizes that there is a need for ongoing attention to food prices in Canada to ensure that consumers are not disproportionately burdened by inflation.
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